Policy packages on right track, but more needed
The Jakarta Post
The government is taking the right direction in terms of investment policy, but more is needed to attract and get foreign investors involved in the country's economic activities.
In a conference held by The Economist on Thursday, foreign investors and financial companies praised the government's recent efforts in inviting more international players into the country, especially through the revision of the 'negative investment list' (DNI) and its deregulation measures.
The DNI was revised two weeks ago, allowing greater foreign ownership in dozens of sectors, while at the same time opening new sectors that were previously closed to foreign investment. Daniel Hui, managing director of China-ASEAN Capital Advisory Co. Ltd., said he was optimistic the domestic investment climate was becoming better.
'It's good to see all the [economic policy] packages and I'm pleased with the progress of the current government,' he said.
China-ASEAN Capital Advisory Co. Ltd. is advisor to the China-ASEAN Fund, which is a US dollar-denominated offshore quasi-sovereign equity fund sponsored by the Export-Import Bank of China, among other institutional investors.
It works under the direction of the People's Republic of China's State Council and was approved by the National Development and Reform Commission.
It currently controls a total of about US$1 billion and is involved in two projects in Indonesia. Hui said that it was looking to enlarge its fund size by an additional $3 billion and to invest more of that money in Indonesia.
He, however, said the government could still improve its approach toward foreign investors by cutting more red tape and combating corrupt practices.
'[The project] approval process is not very smooth because even departments have different says. So it takes a lot of steps to get the approval,' he said.
Such procedure simplification as what Hui has requested is what President Joko 'Jokowi' Widodo knows all too well. The former furniture businessman has been pushing for easier business access and higher investments since taking office.
His target includes propelling Indonesia to the 40th position within the World Bank's ease of doing business ranking this year, up from last year's position of 109th.
Under Jokowi's leadership, the government has so far issued 10 economic policy packages and Coordinating Economic Minister Darmin Nasution said the 11th package ' focusing on the logistics sector ' would be issued soon.
Meanwhile, Euben Paracuelles, executive director of Nomura Singapore Ltd., said that the government's series of economic reforms had put Indonesia back on its clients' radar screen.
'People in Europe and the US have also asked me about Indonesia. These guys are the ones I haven't spoken to in two to three years. Indonesia is definitely back on the radar screen.'
The reforms have fueled Nomura's optimism about Indonesia's economic growth, setting its growth forecast at 5.2 percent for 2016.
Similar praise was voiced by the Swedish government as well. Swedish Ambassador to Indonesia Johanna Brismar Skoog said on Wednesday more Swedish companies had become more interested in investing in Indonesia and making it a hub in Southeast Asia.
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